Price promotions: crack cocaine for brands, and how to kick the habit
Price promotions are crack cocaine for brands. They give you an initial high, but then you crash back. They are bad for your health. And they are a very expensive habit. Brands in the UK spend, wait for it, £14billion a year on discounting, according to an excellent article in Marketing. More than half or all grocery products sold in the UK (56%) are now on deal.
Fortunately, some brave brands are using an alternative promotional strategy we call "brand activation". This involves promoting your brand in a way that does drive short term sales, but actually has a postive effect on reinforcing your brand equity.
For example, Powerade promoted its Olympic sponsorship with an on-pack offer of the water bottle used by athletes. More than 286,000 people entered a unique code online to get this gift. And it seemed to work. 'The Powerade sports-bottle activity was our most successful on-pack promotion,' according to Kerttu Inkeroinen, Powerade brand activation manager.
Another good example of brand activation is the Carling Black Label "Be the Coach" campaign I posted on here. Be the Coach took consumer interactivity to new levels, with soccer fans casting 11 million votes to pick the teams for a special cup match between South Africa's top 2 teams, the Kaiser Chiefs and The Orlando Pirates. The campaign has helped improve brand imagery, most often used and volume.
Brand activation has some big advantages over price promotion and deals:
1. Equity enhancing
Price deals do nothing for your brand equity. If anything, they erode equity, cheapening your brand and getting consumers used to paying a lower price. In contrast, brand activation helps enhance your equity. For example, the Powerade bottle people could claim was the same one used during both the London 2012 Olympics, reinforcing the brand's authentic sporting credentials
2. "In-home POS"
The effect of price promotions evaporates as soon as a consumer puts your product in their basket. In contrast, ideas like the Powerade bottle live on. They give your brand a little bit of presence in your users' everyday lives, creating what I call "in-home point-of-sale (POS)".
3. Creating brand properties
Campaigns like Be the Coach can become ownable, distinctive brand properties that help people recall your brand, if they are repeated over several years. In this way they become part of the brand's "memory structure".
In conclusion, why not take inspiration from Carling Black Label and Powerade in 2013, and try to start kicking your addiction to price promotion in favour of brand activation? Its better for your brand. And what's more, its much more fun to work on!